Living on savings

1246789

Comments

  • AnotherJoe
    AnotherJoe Posts: 19,622
    First Anniversary Name Dropper First Post Photogenic
    Forumite
    I've just started on this journey.
    I forestalled the unemployed/etc argument by telling my insurer I'd retired and IIRC I got about £7 reduction in my costs (possibly simply because my mileage would drop and i no longer needed coverage for using my car for work purposes (commute and travel to customers)

    I'm planning on leasing a car shortly, it will be interesting to see what they say when they ask my income, as its whatever i want it to be. However i have started taking a fixed sum each month from my SIPP so that will show a regular income into my current account.
  • AnotherJoe wrote: »
    I forestalled the unemployed/etc argument by telling my insurer I'd retired

    I generally tell people I'm retired, but I'm wary what I say to insurance companies when they are the ones who get to decide whether you're making fraudulent statements. Safer to tell them exactly what's what, and let them decide which category I fit in.....or so I thought.
  • colsten
    colsten Posts: 17,597
    First Anniversary Photogenic Name Dropper First Post
    Forumite
    AnotherJoe wrote: »

    I'm planning on leasing a car shortly, it will be interesting to see what they say when they ask my income, as its whatever i want it to be.
    It might be safer to pick a number upfront and stick to it, as what you tell insurers will be lodged in at least one industry database (National Hunter etc).
  • westv
    westv Posts: 6,061
    Name Dropper First Post First Anniversary
    Forumite
    Can you lease cars using non guaranteed income?
  • Can you use a combination of bonds to pay you an annual salary each year? Invest say £35k for 1 year, keep £35k back in instant access, £35k in 2year bond and remaining £70k in 3 year bond and £99k in 5 year bond.
    I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.
  • Audaxer
    Audaxer Posts: 3,506
    First Anniversary Name Dropper First Post
    Forumite
    As the OP says he and his wife will have more than sufficient pension income from 2024 to meet their needs, then if they want to use his full savings of £274,000 to live off until then, that is up to them. Assuming the money is in low interest accounts, that would be roughly £40k per year to spend it all. If they need to spend that much to live off for the next 7 years I would assume their pension income after tax would be over £40k, as he says it will be well above what they need.

    However if I was in that position, I would hate to have to spend all those savings over a 7 year period. I would try to maximise the interest as much as possible through various accounts, and maybe try and live off say £30k per year. If they managed that they would then still have at least £70k in savings for unexpected emergencies when the pensions start in 2024. Best way to do it would be to set up a monthly standing order (or orders if from various accounts) amounting to £2,500 as a monthly salary to themselves. Just a thought which could be a consideration.
  • coyrls wrote: »
    [FONT=&quot]So to get down to zero, say £40,000 a year over 7 years, I would put £40,000 in the highest interest instant access account or combination of accounts. I would then put £80,000 into the highest interest 1 year fixed term account and £40,000 into the highest 2,3,4 & 5 year fixed term accounts that compound interest rather than distribute it each year. At the end of year 1, I’d take half of the 1 year fixed term account and place it in the best paying compounding 5 year fixed term account and transfer the remainder into your instant access account(s). For subsequent years you take the maturing fixed term accounts.

    You may or may not keep pace with inflation with this approach and so I would look to make some savings out of your £40,000 a year to carry forward to the next year. You are unlikely to be liable for any income tax, unless you have other sources of taxable income. You will need to ensure that you do not exceed £85,000 with any one provider.[/FONT]

    Interest rates out here, (Australia,) where the money will be kept and drawn down from, are quite good at the moment. I'll have to look at spreading my savings appropriately.

    Thanks for this advice.
    “If you trust in yourself, and believe in your dreams, and follow your star. . . you'll still get beaten by people who spent their time working hard and learning things and who weren't so lazy.”
  • Triumph13 wrote: »
    My challenge to OP would be this - you have saved this money, specifically to do this task. It is now nearly time to spend this money for its intended purpose which is great. The question is, can you handle the psychological adjustment from being a saver to being a spender and to stand by and watch as you burn through all that lovely capital? I know I'm expecting to find that very hard indeed!

    Thanks for this. The money has been amassed from wages, via a superannuation scheme, so I've not had to "save" or watch the pennies.

    However, even though I am not a spender by any stretch f the imagination, my wife makes me look like a drunk sailor on shore leave.

    We have a modest lifestyle planned, with our only extravagance being a Camper van for our holidays.
    “If you trust in yourself, and believe in your dreams, and follow your star. . . you'll still get beaten by people who spent their time working hard and learning things and who weren't so lazy.”
  • Personally, I'd want to do a bit more with the lump sum.

    The lump will initially go into Aussie savings accounts, currently paying 3%.
    “If you trust in yourself, and believe in your dreams, and follow your star. . . you'll still get beaten by people who spent their time working hard and learning things and who weren't so lazy.”
  • fatbeetle
    fatbeetle Posts: 567
    First Anniversary First Post I've been Money Tipped!
    Forumite
    edited 13 September 2017 at 7:56AM
    I believe the OP, but think they would be making an error spending the lump sum down to zero and just relying on the DB pensions. Their plan might work, but as stated it is not optimal.

    DB pensions? Soz what are they?

    Just to clarify

    Come 2014 we will have my wife's super, which, at our (lower than current,) predicted exchange rate, will give us some £45,000 pa.

    I will then be entitled to a full UK state pension, and have a small NHS pension which should pay out somewhere in the region of £70 pw.

    On top of that my M-I-L who is now 83, (fortunately in good health,) has willed her Aussie house to her only daughter, that is currently valued at £350,000.

    ETA: Forgot, SWMBO will still be paid, at half pay, until July 2019.
    “If you trust in yourself, and believe in your dreams, and follow your star. . . you'll still get beaten by people who spent their time working hard and learning things and who weren't so lazy.”
This discussion has been closed.
Meet your Ambassadors

Categories

  • All Categories
  • 342.5K Banking & Borrowing
  • 249.9K Reduce Debt & Boost Income
  • 449.4K Spending & Discounts
  • 234.6K Work, Benefits & Business
  • 607.1K Mortgages, Homes & Bills
  • 172.8K Life & Family
  • 247.4K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.8K Discuss & Feedback
  • 15.1K Coronavirus Support Boards